I like your comparison to law, but there are multiple margins here.
Firstly, suppose that a small change in relative respect or pay for academia and finance convinces some bright maths PhD student to go into finance as opposed to seeking tenure. He’s marginal in the sense that he was shifted by that effect, but there’s nothing to suppose he’ll be a marginal financier in the sense of only just clinging to a job. In fact, my experience was that the prestige of academia (plus status quo bias) meant that the very best and brightest were the ones who tried to become professors, whereas the relative dullards (like myself) tried to get a real job. In other words, I suspect the marginal financier by application might well be an above-average financier by results.
Secondly, neither law nor finance are purely champion games. It is possible for the quality of legal advice to go up across the board, and for people to have improved access to legal services, and both these things will improve our quality of life (and the economy) although there are of course costs and diminishing returns. Similarly, it is possible for investment decisions to be more productive across the board, and it is possible for people to have improved access to capital markets. And I say that without denying that there will always be a premium for the very best.
I am certainly not saying that we should set up poorly accredited Hedge Fund Schools across the country churning out thousands of barely-trained financiers based on false promises of millions to come (although come to think of it, that does sound like a good scam).
In fact, my experience was that the prestige of academia (plus status quo bias) meant that the very best and brightest were the ones who tried to become professors, whereas the relative dullards (like myself) tried to get a real job.
This certainly was the case 20 to 30 years ago, but I’m not sure it’s the case now.
It is possible for the quality of legal advice to go up across the board, and for people to have improved access to legal services, and both these things will improve our quality of life (and the economy) although there are of course costs and diminishing returns.
Sure- but for these gains to impact wages they need to be captured by workers, and it’s not clear that this happens on a large enough scale. (It seems to me that many people try to adjust the status of fields mostly to account for these positive externalities.)
(although come to think of it, that does sound like a good scam)
I am under the impression that most of the personal finance seminar offerings of the Rich Dad Poor Dad variety are the slightly less formal version of this.
I like your comparison to law, but there are multiple margins here.
Firstly, suppose that a small change in relative respect or pay for academia and finance convinces some bright maths PhD student to go into finance as opposed to seeking tenure. He’s marginal in the sense that he was shifted by that effect, but there’s nothing to suppose he’ll be a marginal financier in the sense of only just clinging to a job. In fact, my experience was that the prestige of academia (plus status quo bias) meant that the very best and brightest were the ones who tried to become professors, whereas the relative dullards (like myself) tried to get a real job. In other words, I suspect the marginal financier by application might well be an above-average financier by results.
Secondly, neither law nor finance are purely champion games. It is possible for the quality of legal advice to go up across the board, and for people to have improved access to legal services, and both these things will improve our quality of life (and the economy) although there are of course costs and diminishing returns. Similarly, it is possible for investment decisions to be more productive across the board, and it is possible for people to have improved access to capital markets. And I say that without denying that there will always be a premium for the very best.
I am certainly not saying that we should set up poorly accredited Hedge Fund Schools across the country churning out thousands of barely-trained financiers based on false promises of millions to come (although come to think of it, that does sound like a good scam).
Agreed that there are multiple margins.
This certainly was the case 20 to 30 years ago, but I’m not sure it’s the case now.
Sure- but for these gains to impact wages they need to be captured by workers, and it’s not clear that this happens on a large enough scale. (It seems to me that many people try to adjust the status of fields mostly to account for these positive externalities.)
I am under the impression that most of the personal finance seminar offerings of the Rich Dad Poor Dad variety are the slightly less formal version of this.